How much do children actually cost?

family of three

Have you ever wondered how much children actually cost? Obviously we know kids don’t come cheap, but did you know that they could set you back a whopping £96,416?

According to research from HL Savings & Resilience Barometer (dated July 2023), couples with kids spend an average of £5,356 more every year than couples without. That means that over 18 years you’d be spending an extra £96,416.

Parents are less likely to have enough cash at the end of the month, enough emergency savings, or enough life insurance than non-parents. They’re also more worried about debt.

Sarah Coles, head of personal finance, at Hargreaves Lansdown, says: “Children may be priceless, but they come with a shocking price tag. Couples with kids spend an average of £5,356 more every year than couples without – which over 18 years comes to an eye-watering £96,416. And as a result, their financial resilience suffers across the board. For single parents, life is even tougher, and they face far lower resilience on almost every measure.”

Even the basics cost…

It’s not what parents need to hear as they embark on one of the most expensive times of year. But everything is more expensive with children in tow. Even when you just boil it down to the absolute essentials, couples with kids spend almost a fifth more than those without (£2,266 a month vs £1,923), while single parents spend more than a quarter more than singles without (£1,428 vs £1,150). It’s no wonder that, at the end of the month, a couple with kids has an average of £227 left after paying the bills, while a couple without children has £382, a single person living alone has £34 and a single parent just £25.

It’s no wonder that only among couples with no children do more than half of people have enough cash at the end of the month to be resilient. Only 44% of parental couples have enough cash at the end of the month – and 25% of single parents (compared with 34% of singles living alone, and 54% of couples with no children).

Parents have less savings too

Running so close to the edge tends to mean parents have less in savings too. 79% of couples without children have enough emergency savings to cover at least three months’ worth of essential expenses, which drops to 65% among couples with kids, 52% among single people, and 24% among single parents. Parental couples are also more worried about their debts than non-parents (73% aren’t concerned vs 89% of couples without children). Single parents are even more worried (only 65% aren’t concerned, vs 81% of singles with no kids).

Other financial woes for parents

It’s not just the immediate future that’s a worry. They’re also less likely to have enough life insurance in place: 62% of couples without kids have enough cover, compared to only 26% of couples with kids and 8% of single parents. This is likely to be because their need for life insurance rises dramatically after we have children – and either parents don’t realise they have a shortfall, or they’re worried about the cost.

Just how you can withstand the cost of kids depends on how much you earn, so HL and Oxford Economics broke it down by income and looked at the middle fifth of earners too. The differences are even more striking. Parents on average incomes are significantly less likely to have enough cash left over at the end of the month (20% vs 37%) and roughly half as likely to have enough in savings (36% v 73%).

So there you have it. We all knew that children were expensive, but it seems that parents really are financially worse off than their childfree counterparts.